House prices ease in July

by Alistair Helm in

In my opinion the most accurate measure of house prices in NZ is the Stratified House Price Index published monthly by the Real Estate Institute. The index was developed in 2009 in cooperation with the Reserve Bank to provide a measure of real price movement by removing the influence of individual regions, districts or suburbs skewing the data by excess demand as could be occurring in today's market influenced by the Auckland market.

The July figures released this week saw a noticeable easing of price across the National picture as well as in Auckland and the other key cities. Whilst not as yet a trend, there is a sense of the market beginning to push its natural limit especially as we are in Winter. Another component of this sense of easing in the pace of growth in house price inflation was the increase in inventory reported earlier this month pushing more regions into a balance market and out of a sellers' market. 

Below are the charts for Stratified price index for the 3 cities and the national picture comparing the current price to the past 6 years covering the prior peak of the market and crash in property prices in 2008. 

 

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At last some easing in the property market

by Alistair Helm in ,

The latest NZ Property Report released today by Realestate.co.nz for the month of July for the first time in what seems like an eternity shows that the pressure in the property market caused by a shortage of listings may be easing.

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In July 9,857 new listings came onto the market, which compares with 9,411 in July last year. Not much of an increase you might well say but given the fact that the past 5 months have all seem lower numbers than a year previous – it is good to see greater choice.

This increase in new listings however did not actually increase the available stock on the market. At the end of June there were 37,615 properties on the market, by the end of July that had fallen by 1,383 to 36,231. However available stock of property on the market is not the true test of the state of the property market; for that you need to look at the rate of sale. For June the sales on a seasonally adjusted basis were down from 6,748 to 6,217.

So with an increase in new listings matched to a slower sales, the inventory as measured by the number of weeks of equivalent sales actually rose in July. The Property Dashboard for July shows a level of 26.7 weeks  - still placing the market firmly in favour of sellers but some easing does bring some hope for buyers.

Across the country the picture reflected the national trend with 9 regions experiencing a sellers’ market as compared to 13 last month. For the first time for quite a while one region – the West Coast of the South Island is showing a buyers’ market.